Solve the problem.
-Find the future value accumulated in an annuity after investing periodic payments of $300 for 6 years at an annual interest rate of 7%, with payments made and credited 4 times per year.
A) $8853.30
B) $15,935.95
C) $10,623.97
D) $5311.98

Question

Quizplus · Accepted Answer

The future value of an annuity is the sum of the present values of each of the payments made over the life of the annuity. In this case, we have 6 years of payments, with 4 payments made per year, for a total of 24 payments. The present value of each payment is $300 / (1 + 0.07 / 4)^n, where n is the number of payments made up to that point. The future value of the annuity is the sum of the present values of all 24 payments.Using a financial calculator, we can find that the future value of the annuity is $8,853.30.

Solve the Problem. -Find the Future Value Accumulated in an Annuity After Investing